Trading in bitcoin started off the year strong with a 30% rally, but it has fallen 15% from yesterday’s high of $995 to $848 after the announcement on Bitstamp.

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On December 5^th the Chinese government banned banks in the country from doing transactions in Bitcoins and on the 16^th they banned payment companies from doing business with Bitcoins. Chinese citizens that were interested in acquiring the currency found a way around the law, they bought Bitcoin certificates online on Taobao (China’s Ebay). But now this door may be closed as well. Taobao announced today that from January 14^th, this practice will be forbidden. The effect is that this may decrease demand for Bitcoins in China considerably and possibly put more pressure downwards on its price.

From a technical point of view, we can find support for the currency around $830, but if it is broken it might reach $805 until it finds support again.

(Update – prices back up as BTC China announces its version of vouchers)